Standards on auditing

SA 200: Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing

• This Standard establishes the independent auditor’s overall responsibilities when conducting an audit of financial statements in accordance with SAs
• Ethical Requirements Relating to an Audit of Financial Statements — The auditor should apply the following fundamental principles of professional ethics relevant when conducting an audit of financial statements; (a) Integrity; (b) Objectivity; (c) Professional competence and due care; (d) Confidentiality; and (e) Professional behavior
• Professional Skepticism— Professional skepticism includes being alert to, for example; (a) Audit evidence that contradicts other audit evidence obtained; (b) Information that brings into question the reliability of documents and responses to inquiries to be used as audit evidence; (c) Conditions that may indicate possible fraud; (d) Circumstances that suggest the need for audit procedures in addition to those required by the SAs
• Professional Judgment— Professional judgment is necessary in particular regarding decisions about: (a) Materiality and audit risk; (b) The nature, timing, and extent of audit procedures used to meet the requirements of the SAs and gather audit evidence; (c) Evaluating whether sufficient appropriate audit evidence has been obtained, and whether more needs to be done to achieve the objectives of the SAs and thereby, the overall objectives of the auditor; (d) The evaluation of management’s judgments in applying the entity’s applicable financial reporting framework; (e) The drawing of conclusions based on the audit evidence obtained, for example, assessing the reasonableness of the estimates made by management in preparing the financial statements
• Sufficient Appropriate Audit Evidence and Audit Risk— To obtain reasonable assurance, the auditor shall obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level and thereby enable the auditor to draw reasonable conclusions on which to base the auditor’s opinion